By Kevin Plumberg

HONG KONG (Reuters) - Asian stocks rose and government bond prices fell on Friday after a report that the U.S. government is considering taking over the two top U.S. mortgage finance companies helped soothe fears about further fallout from the global credit crisis.

The dollar also climbed after the New York Times said Washington may place Fannie Mae (FNM.N: Quote, Profile, Research) and/or Freddie Mac (FRE.N: Quote, Profile, Research) under conservatorship if problems at the government-sponsored entities worsen.

That essentially means U.S. taxpayers would bear any losses on the $5 trillion (2.5 trillion pounds) in mortgages the companies hold or guarantee, the newspaper said, citing people briefed on the plan, who stressed no action was imminent.

Markets reacted with relief after watching Fannie's and Freddie's shares fall 30 percent and 45 percent, respectively, this week on fears they may not be able to get the capital they need to survive.

"Investors will pounce on any bit of positive news especially if it involves these mortgage lenders and the U.S. government," said Mona Chung, fund manager with Daiwa Asset Management in Hong Kong.

"But this is looks like another short-term fix and we still can't see the end of the tunnel as far as the turmoil in the financial sector is concerned," she said.

European shares were expected to open up to 0.9 percent higher, boosted by heavyweight oil stocks as crude oil broke back above $140 a barrel, and by talk of the potential U.S. government rescue plan.

Japan's Nikkei share average .N225 closed down 0.2 percent, while shares elsewhere in the Asia-Pacific region .MIAPJ0000PUS were up 1.3 percent by 7:30 a.m. British time, heading for the first weekly gain since mid-May.